- There are some other important issues to consider through your life time. We will investigate and discuss some of these over the next few weeks starting with differences in marriage contracts.Taking you through different marriage financial tips. – THERE ARE 3 BASIC MARRIAGE CONTRACTS. Consider which one you would like to govern your marriage and discuss this with your lawyer or financial adviser and determine which is best for you. Evaluate your spending habits. Discuss whether you plan to have a joint or separate account and separate bank accounts. Are you both employed? What are your long-term goals with jobs? Who will take care of your children when you have them? If one spouse specialises in a field and brings in most of the earnings then the spouse who is allowing for the extra hours at work or any other sacrifices, should be compensated for assisting their partner in their career path. Financial discussions in a marriage are very important as this is a business partnership. Do not leave discussing finances with your partner until debt gets out of hand. Work together in sorting out the debt and make adjustments to your budget. Make sure that you know who you are marrying financially and look at paying off most of your debt before entering into a marriage. Save for your wedding and try not to take loans for that perfect day. There is nothing more stressful than over indebtedness when starting your life with someone. It is also the leading cause of divorce.
- IF YOU HAVE CHILDREN SAVE AS MUCH AS POSSIBLE. Private schooling will cost an average of R100 000, 00 per year. Rather put money away for your child than spend unnecessary amounts on toys and excess clothing. Invest in unit trust rather than expensive education products. Teach your child the value of money without going overboard. Create financial balance in your life and the life of your child. Consider a third party to manage your child’s financial affairs. Single parent should have life insurance to provide sufficiently in the case of death. Remember that a Will is key in determining who will manage your child’s finances. If you do not have a beneficiary in your will your spouse will become the legal guardian of your will, finances and your children’s finances. You might not want this so make sure your Will is up to date especially in the event of a divorce.
- LIFE INSURANCE IS MEANT TO PROVIDE YOUR DEPENDENTS WITH SECURITY in the event of your death. It is there to cover the gap left between what you have saved and what your family will need to live off when you are incapacitated or have died. Make sure that you calculate this correctly and get advice on this. There is a risk of over-insurance. If you have sufficient life cover, if your income is protected in the event of disability and if you have a good medical aid, you should be able to handle life’s unexpected events just fine.
Plan in this sequence – Death and Disability, Emergency cash fund, Debt Reduction Plan, Long term savings.
- A WILL IS A VITAL PART OF A FINANCIAL PLAN. It should be put in place as soon as you start working and as soon as you start accumulating assets. It is critical when you have children. Though it is easy to draft a Will it is best to approach an expert for advice. Clearly identify what you want to have happen with your money, which is legally binding only in a will. If you don’t do this a government appointed official could decide what happens to it and this stalls the process in winding up your estate. If you die without a Will, you die intestate, which complicates the winding up of your estate and makes it difficult for the family who is left behind. Make sure you update your Will every year. A Will that is more than 3 years old is out of date. Also important to understand is that the beneficiary on a life policy will take priority if the beneficiary differs on the Will.
- HOW TO MAKE IT LESS STRESSFUL IF YOUR PARTNER DIES? Discuss financial matters with your partner and know how the monthly budget works, how the monthly payments are made, where you stand on the bond and other debt. Know where your partner’s Will is held, policies and bank account details. It is vital to have a bank account in your own name as, in the event of death, your partner’s bank account will be frozen and you will not have access to funds. Have sufficient funds to cover several months living expenses. Keep a list of all assets and liabilities, files with recent investment statements and contact details of financial advisors, a list of all the contracts in your spouse’s name, such as cell phone contracts and the list of passwords and electronic records.
We hope and trust that these marriage financial tips will help you to avoid unnecessary stress when it comes to your finance.